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Satchu's Rich Wrap-Up
 
 
Wednesday 24th of April 2019
 
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The Latest Daily PodCast can be found here on the Front Page of the site
http://www.rich.co.ke

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I must say I am thoroughly enjoying myself on @MetropolTVKE I have a great team Old Hands like @Steve_Kimani who is My Producer @SteveAudi3 my Director @TerryanneChebet Try Us 8-9pm @GOtvKenya
Africa


I must say I am thoroughly enjoying myself on @MetropolTVKE I have a
great team Old Hands like @Steve_Kimani who is My Producer @SteveAudi3
my Director and a great young and hungry team cc @TerryanneChebet Try
Us 8-9pm @GOtvKenya #Signet @StarTimesKenya @mmnjug

Macro Thoughts

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BOOM? #Bitcoin has formed its first bullish golden cross since Oct2015, acc to Bitstamp pricing that includes weekend moves @Schuldensuehner
Africa


The milestone follows 35% rally for Bitcoin past $5,600, on track for
its best monthly gain since the height of the crypto frenzy in
Dec2017. (via BBG)

Conclusions

I am bullish BITCOIN and this is a Buy Recommendation at $5,561.00

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Explosive move higher for the dollar $DXY this morning and following through on the 2 week long bull flag that broke out last week. @AdamMancini4 97.64
Africa


We're close to my 97.70 target and this is make-or-break for DXY -
this has been tested 4 times since November and its got a shot now at
a breakout

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How to predict a coup @TheEconomist Daily Chart
Law & Politics


TWO AGEING PRESIDENTS, one bad and one awful, were forced from office
this month: Abdelaziz Bouteflika in Algeria and Omar al-Bashir in
Sudan. Mr Bouteflika had been in power since 1999; Mr Bashir, since
1989. Their hasty and unlamented departures raise a question: how easy
is it to predict a coup?
One obstacle to building a good coup-predicting model is that coups
are extremely rare and becoming even more so. However, as our
print-edition story explains, social scientists now have more tools
than ever before at their disposal. Perhaps the most rigorous
quantitative forecast of sudden regime changes is CoupCast, published
by One Earth Future, an NGO.
CoupCast finds that economic misery is linked to higher coup risk, as
is extreme weather. But political factors matter more. Dictators tend
to lose popularity when they stay in office for too long. Autocrats
who cling to power after losing elections are particularly likely to
be deposed.
The strongest predictor of future instability is past instability.
CoupCast rated Algeria the country most likely to experience a coup
just before Mr Bouteflika's exit. As for who might be next, the
leaders of Burkina Faso, Afghanistan and South Sudan should be
nervous.

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10 NOV 14 ::Ouagadougou's Signal to Sub-Sahara Africa
Law & Politics


What’s clear is that a very young, very informed and very connected
African youth demographic [many characterise this as a ‘demographic
dividend’] – which for Beautiful Blaise turned into a demographic
terminator – is set to alter the existing equilibrium between the
rulers and the subjects, and a re-balancing has begun. We need to ask
ourselves; how many people can incumbent shoot stone cold dead in such
a situation – 100, 1,000, 10,000? This is another point: there is a
threshold beyond which the incumbent can’t go. Where that threshold
lies will be discovered in the throes of the event. Therefore, the
preeminent point to note is that protests in Burkina Faso achieved
escape velocity. Overthrowing incumbents is all about acceleration,
momentum and speed best characterised by the German word ‘Blitzkrieg’.

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@realDonaldTrump brought the head of @Twitter to the Oval Office where he complained about losing followers. @washingtonpost
Law & Politics


President Trump on Tuesday met privately with Twitter CEO Jack Dorsey,
a huddle at the White House between one of the site’s most prolific
users and an executive who’s faced criticism for the way Twitter has
handled the president’s tweets.
The meeting came as Trump continues to attack the tech industry,
threatening to regulate Facebook, Google and Twitter out of concern
that they censor conservatives online — an allegation those companies
fiercely deny.
The president’s latest salvo arrived just hours before he met with
Dorsey: Trump accused Twitter of playing “political games" and
tampering with his nearly 60 million followers.
A significant portion of the meeting focused on Trump’s concerns that
Twitter quietly, and deliberately, has limited or removed some of his
followers, according to a person with direct knowledge of the
conversation who requested anonymity because it was private.
Trump said he had heard from fellow conservatives who had lost
followers for unclear reasons as well.
But Twitter long has explained that follower figures fluctuate as the
company takes action to remove fraudulent spam accounts. In the
meeting, Dorsey stressed that point, noting even he had lost followers
as part of Twitter’s work to enforce its policies, according to the
source, who described the meeting as cordial.
“How can we put some context around it so people are aware that that
content is actually a violation of our rules and it is serving a
particular purpose in remaining on the platform," Vijaya Gadde, the
company’s head of legal, policy, and trust and safety, said at an
event hosted by the Post.

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29-APR-2013 :: The Brothers Tsarnaev and the Long Tail Put in a different way, there are surely many Brothers Tsarnaev in this new c21st of ours
Law & Politics


Put in a different way, there are surely many Brothers Tsarnaev in
this new c21st of ours.
 In truth, that disaffection might have any number of reasons and I am
reminded of my French O level where I studied Albert Camus’ L’Etranger
and Camus said;
“The byronic hero, incapable of love, or capable only of an impossible
love, suffers endlessly. He is solitary, languid, his condition
exhausts him. If he wants to feel alive, it must be in the terrible
exaltation of a brief and destructive action*.”

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28-JAN-2019 :: "This catastrophic event changes the way we think and act, moment to moment, week to week, for unknown weeks and months to come, and steely years. our world, parts of our world, have crumbled into theirs, which means we are living in
Law & Politics


Don De Lillo wrote about this about Terror

‘’Terror’s response is a narrative that has been developing over
years, only now becoming inescapable. It is our lives and minds that
are occupied now. This catastrophic event changes the way we think and
act, moment to moment, week to week, for unknown weeks and months to
come, and steely years. our world, parts of our world, have crumbled
into theirs, which means we are living in a place of danger and rage’’

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17-SEP-2012 :: Now what are the consequences of this new 21st century madding crowd? A madding crowd which can be inflamed by a fellow with a camera and an account with YouTube.
Law & Politics


There are plenty of flame throwers in a population of seven billion.
Bacile has shown that the 21st century equivalent of throwing the
match is a camera and the knowledge of how to upload content onto
Youtube. The consequences of throwing a Match onto a tinderbox are
entirely unpredictable, by their nature.

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The end of normal @TheEconomist A terrifying look at the consequences of climate change
Law & Politics


climate change is a devilish problem for humanity: at once urgent and
slow-moving, immediate and distant, real and abstract. It is a
conundrum for writers, too. Relegating it to a human-interest story—a
Bangladeshi displaced by rising sea levels, say—downplays its
civilisation-wide significance; sticking to scary forecasts—200m
climate refugees by 2050, the un warns—diminishes its visceral
relevance. That may be why, for all its existential gravity, the
subject has yet to produce a great work of literature. It lends itself
instead to dystopian science-fiction, or to compendiums of scary
science facts, sometimes derided as “climate porn”. The latest in that
genre, “The Uninhabitable Earth” by David Wallace-Wells, is
unabashedly pornographic. It is also riveting.

Yet, as the author makes starkly clear, global warming is no parable.
Far from being a problem only for future generations, it is wreaking
havoc now. Five of the 20 worst fires in California’s history blazed
in 2017; the deadliest incinerated the town of Paradise last year.
Floods are becoming wetter, droughts drier and hurricanes fiercer.
Such calamities, Mr Wallace-Wells notes, are not the “new normal”;
they mark “the end of normal”, as climate change tips Earth beyond the
conditions that allowed humans to evolve in the first place. And that
is with barely 1°C of man-made warming since the industrial
revolution.

Things will get much worse. The world is on course to become at least
3°C hotter than in pre-industrial times. Within a few decades, this
could mean that temperatures in Mecca render the haj physically
impossible for many of the 2m Muslims who make the pilgrimage each
year. With a rise of 7°C— plausible if humanity remains wedded to
fossil fuels—swathes of Earth’s equatorial band would become
uninhabitable. Even if warming did not exceed 2°C, as stipulated in
the Paris climate agreement of 2015, rising seas may engulf
$1trn-worth of American property.

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All the available evidence is informing us that the ''Weather'' Tail risk is seriously elevated on a near term, medium term and long term basis
Law & Politics


Economists like NN Taleb might characterise what I am outlining as
''Tail Risks''  Tail risk is the additional risk of an asset or
portfolio of assets moving more than 3 standard deviations from its
current price, above the risk of a normal distribution.[1]  Tail risk
is sometimes defined less strictly, as merely the risk (or
probability) of rare events. Taleb made his Fortune and name correctly
betting that the market was mispricing ''Tail Risks'' or we can call
it ''haywire'' risk. All the available evidence is informing us that
the ''Weather'' Tail risk is seriously elevated on a near term, medium
term and long term basis and in a very non-linear outcome Africa has
18 out of the 20 most climate affected Countries.

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Currency Markets at a Glance WSJ
World Currencies


Euro 1.1204
Dollar Index 97.70
Japan Yen 111.806
Swiss Franc 1.0188
Pound 1.2925
Aussie 0.7043
India Rupee 69.891
South Korea Won 1151.11
Brazil Real 3.9191
Egypt Pound 17.1825
South Africa Rand 14.3562

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.@CocaCola reported a 5 per cent year-on-year increase in net revenue to $8bn and said an estimated 2 points of the sales growth was "primarily related to bottler inventory build in order to manage uncertainty related to Brexit" @FT
International Trade


Stockpiling to guard against a disorderly Brexit gave Coca-Cola’s
revenue and adjusted earnings an additional boost during the first
quarter, helping the beverages group squeak past Wall Street
forecasts.
Coca-Cola reported a 5 per cent year-on-year increase in net revenue
to $8bn and said an estimated 2 points of the sales growth was
“primarily related to bottler inventory build in order to manage
uncertainty related to Brexit”, and added that earnings per share had
benefited to the tune of 2 per cent for the same reason.
Earlier this year, management at Coca-Cola European Partners, the
world’s biggest independent Coca-Cola bottler, revealed they had begun
stockpiling ingredients in the UK to minimise any disruption that
might stem from the UK’s departure from the EU. The UK represented
about one-fifth of CCEP’s overall sales, which were €11.5bn in 2018.
Although the actual Brexit date has since been pushed back by about
six months, management at CCEP highlighted the potential for tariffs
or delays in transportation as the biggest risks they faced. More
broadly, the uncertainty of Brexit has prompted many businesses to
begin stockpiling supplies.

Emerging Markets

Frontier Markets

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Some of the women among the thousands still protesting in front of #Sudan's military HQ #SudanUprising @davidpilling
Africa


Conclusions

A Portal into the c21st Future Matters Sudan as interpreted by 2
Photographs one by the @FT's @davidpilling and @AnujChopra and a Photo
of the Past something @AlsisiOfficial and MBZ would be wise to think
about

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African Union gives Sudan army more time to cede power @FT
Africa


The African Union has eased pressure on Sudan’s military council to
give up power, saying it will give the country’s new leaders three
months to hand over to civilian authorities.
The AU had originally told Sudan’s military leaders to return the
country to civilian rule in 15 days or face suspension from the
regional body, after the army ousted President Omar al-Bashir in a
coup on April 11.
If the AU suspends Sudan it would make it more difficult for the new
regime to gain international recognition and to begin discussions with
multilateral institutions needed to get its wrecked economy back on
track after years of sanctions.
The move by African leaders comes as a blow to protest leaders who
have asked the international community to keep pressure on the
military in Khartoum to move aside.
The military council, led by General Abdel-Fattah Burhan, has said it
is “not greedy for power” and intends to hand over authority to a
transitional government.
This would govern the north African country of 40m people until
elections can be held after two years.
Some members of the civilian opposition want a longer transition of
four years, arguing that Sudan’s democratic institutions have been so
hollowed out during 30 years of dictatorship under Mr Bashir that they
need more time to be repaired.
There have been sharp disagreements between the council and protesters
about the make-up and duration of the new transitional government.
The Sudanese Professionals Association, which has spearheaded the
demonstrations, on Sunday broke off talks with the military council,
accusing it of playing a “wicked game”.
“The problem now is a lack of communication between the military
council and the civilian opposition,” said Muntasir Atayib, a senior
member of the Sudanese Professionals Association.
“The council wants to equate the opposition with some of the political
forces that were part of the old regime,” he said.
Hassan Elhag Ali, professor of political science at the University of
Khartoum, said he thought the council was trying to divide civilian
opposition by refusing to limit civilian representatives to those who
had taken part in the protests.
Demonstrations began in December over a sharp rise in bread prices and
quickly spread to the whole country. The protests reached a head in
April when tens of thousands of protesters camped out in front of the
military headquarters and armed forces previously loyal to Mr Bashir
refused to shoot into the crowd.
Abdel Fattah al-Sisi, Egypt’s president who also holds the rotating
presidency of the AU, said African leaders had agreed that Sudan
should “quickly restore the constitutional system through a political
democratic process,” but that “we agreed on the need to give more time
to Sudanese parties to implement these measures”.
Mr Sisi, a former army officer who came to power in a popularly backed
coup in 2013, is believed to be reluctant to put the AU’s weight
behind a motion delegitimising the military government.
Egypt has long-viewed political developments in its southern neighbour
as a national security concern. Ziad Akl, analyst at the Cairo-based
Al-Ahram Center for Political and Strategic Studies, said that even
when Mr Bashir was in charge, there was a flow of weapons, militants
and illegal migrants crossing into Egypt from Sudan.
“Cairo is not afraid of democratic rule in Sudan, but it would prefer
that it did not emerge,” he said. “It considers those from a military
background more trustworthy when it comes to maintaining regional
interests.”
Egypt would also be reluctant to stand by while an Islamist government
emerged in Sudan, Mr Akl said.
Mr Sisi ousted an elected Islamist president from the Muslim
Brotherhood group. It led to Egypt’s suspension from the AU for a
year, but it was readmitted after Mr Sisi was elected president.

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Warning Signs for Zambia as Eurobond Curve Becomes More Inverted @markets
Africa


Zambia’s finance minister said this month there’s no need to worry
about the government’s debt load. Investors are sending the opposite
signal.
The yield curve for the southern African nation’s Eurobonds, which are
the worst performers in emerging markets in the past year, is
increasingly inverted -- meaning that shorter-dated securities have
higher yields than those with longer maturities.
That’s a rarity and often occurs when countries are already in
default, with one example being Venezuela.
Yields on Zambia’s $750 million of bonds due in 2022 have climbed
almost 500 basis points since early February to 17.45 percent.
Its 2027 bonds trade at 15.8 percent. No other country that’s not in
default has yields as high.
The inversion is partly because the shorter bonds have a bullet
maturity and have to be paid back in one go, while the longer ones
amortize, making them less risky, according to Neville Mandimika, an
analyst at Rand Merchant Bank in Johannesburg.
But it also suggests traders are getting more nervous, he said.
“That yield curve inversion can be seen as an indicator of how
concerned investors are about the situation,” he said. “In times of
extreme debt concerns, the less risky bond will price at a premium to
the bullet bond.”
Finance Minister Margaret Mwanakatwe said in an interview with
Bloomberg TV on April 12 that Zambia is borrowing to improve the
country’s infrastructure and the debt should be seen as an investment.
Africa’s second-biggest copper producer is battling to shore up its
finances and has been in on-off talks with the International Monetary
Fund for more than a year about a loan.
Bank of America says it could be forced into restructuring if it fails
to get an IMF bailout or friendlier terms on bilateral loans from
China, which it’s trying to renegotiate.
Investors are also watching dwindling foreign-exchange reserves.
They’ve halved in the past three years to $1.5 billion.
They now cover barely 10 percent of Zambia’s external debt, which is
the lowest ratio among all African nations that have sold dollar
bonds, according to data compiled by Bloomberg.

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South Africa All Share Bloomberg +12.91% 2019
Africa


Dollar versus Rand Chart INO 14.359 [in big trouble]

https://quotes.ino.com/charting/index.html?s=FOREX_USDZAR&t=f&a=&w=&v=d12

Egypt Pound versus The Dollar Chart INO 17.1375

https://quotes.ino.com/charting/index.html?s=FOREX_USDEGP&t=f&a=&w=&v=d12

Egypt EGX30 Bloomberg +12.35% 2019

http://www.bloomberg.com/quote/CASE:IND

Nigeria All Share Bloomberg -4.27% 2019

http://www.bloomberg.com/quote/NGSEINDX:IND

Ghana Stock Exchange Composite Index Bloomberg -4.30% 2019

http://www.bloomberg.com/quote/GGSECI:IND

read more


23-APR-2019 :: What Lies Beneath and Petrichor
Kenyan Economy


I am reading an Article by Robert Macfarlane headlined What lies
beneath. The Article begins ''We live in an age of untimely
surfacings'' and continues ''The same month, water levels in the River
Elbe dropped so far that “hunger stones” were revealed – carved
boulders used since the 1400s to commemorate droughts and warn of
their consequences. One of the stones bears the inscription “Wenn du
mich siehst, dann weine” (If you see me, weep)''

These unburials also disrupt simple notions of Earth history as
orderly in sequence, with the deepest down being the furthest back.
Epochs and periods are mixing and entangling. “The problem,” writes
the archaeologist Þóra Pétursdóttir, “is not that things become buried
far down in strata – but that they endure, outlive us, and come back
at us with a force we didn’t realise they had, a dark force of
‘sleeping giants’,” roused from their deep-time slumber.

As we scan the sky for rain clouds and sniff the air greedily for the
smell of Petrichor [Petrichor (/ˈpɛtrɪkɔːr/) is the earthy scent
produced when rain falls on dry soil. The word is constructed from
Greek petra (πέτρα), meaning "stone", and īchōr (ἰχώρ), the fluid that
flows in the veins of the gods in Greek mythology]  Petrichor odour
"... was due to the presence of organic substances closely related to
the essential oils of plants ..." and that these substances consist of
"... the fragrance emitted by thousands of flowers ..." absorbed into
the pores of the soil, and only released when displaced by rain. After
attempts to isolate it, he found that it "... ap peared to be very
similar to, if not identical with, bromo-cedren, derived from essence
of cedar." These are indeed human instincts that have been with us I
am sure since the beginning of time. Today some of us might dial up
Accuweather or some such Platform in order to inform of us of what our
[once] finely tuned bodies already understand at an elemental level.
Sifting that original and ancient Signal from the c21st Noise is
surely the problem. It is surely a fact that the Age of The Machine,
the Smart Phone and Algorithms has blunted our ability to listen to
Nature and we are evidently tone deaf not unlike those Folks on the
sidewalk who would quite likely bump straight into you whilst studying
a Tweet. The reason ''Petrichor'' comes to my mind is surely that in
the current ''rainy'' season of very light and occasional showers, I
am being in fact assailed by multiple releases of the odour.

Last week I was listening to Dr. Patrick Njoroge the Governor of the
Central Bank who was visiting Washington for the IMF World Bank Spring
meeting and took the opportunity to do some ''Investor Relations''
work on our behalf. Dr. Njoroge advocates our Position with coherence
and conviction and he performs an invaluable Task, which practically
no one else does, in fact. Dr. Njoroge spoke of the lack of rain as
posing up to a 1% risk on FY 2019 GDP. One of the functions of an
Investor Relations exercise is you put your best Foot Forward but in
my experience drought episodes have typically taken bigger chunks out
of our GDP and there is a powerful negative feedback loop effect. Our
Food Price Profile is actually high beta [with an observable Price
Gouging Bias] , so the first thing that happens is Food Prices start
climbing. Already our Food Import Bill has started to spike. This then
feeds into inflation which then poses a monetary policy question.
Professor Ndungu [Dr. Njoroge's predecessor] in 2011 argued that it
was not a function of monetary policy to respond to such a situation.
The markets disavowed him of that notion in 2011 and you will recall
that rates were forced as high as 24% before the situation was brought
back under control. Economists like NN Taleb might characterise what I
am outlining as ''Tail Risks''  Tail risk is the additional risk of an
asset or portfolio of assets moving more than 3 standard deviations
from its current price, above the risk of a normal distribution.[1]
Tail risk is sometimes defined less strictly, as merely the risk (or
probability) of rare events. Taleb made his Fortune and name correctly
betting that the market was mispricing ''Tail Risks'' or we can call
it ''haywire'' risk. All the available evidence is informing us that
the ''Weather'' Tail risk is seriously elevated on a near term, medium
term and long term basis and in a very non-linear outcome Africa has
18 out of the 20 most climate affected Countries.

Returning to Kenya. Last Year good rains meant that Agriculture was a
serious Tail-Wind. From our Horticulturists to our Tea Farmers, to our
Small-Holder Farmers, everyone did well. Importantly, Agriculture has
an important economic diffusion effect because of the volume of
Stakeholders. The Shilling which had traded double digits not too long
ago and for the first time in a number of years is back around the
101.00 level and the market anticipates additional food imports. It
appears that President Kenyatta and Raila Odinga are travelling to
visit Xi Jinping together [a condition precedent of further loans it
seems post FOCAC and in order to reduce Chinese Political risk
exposure and I am sure its front and centre given how much they are on
the hook for in Venezuela for example] to ask for a multibillion
shilling increase for the extension of the SGR to Kisumu. Tax
collection data [and more importantly the Public response which is as
negative as I have ever witnessed] is signalling the pips are
squeaking and that collections are now maxed out. Sure the Eurobond
[predicted as soon as the IMF rolls over the Insurance Facility] will
kick the can down the road. Whether You call it luck or You call it
resilience, lets hope ours does not run out.

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The human nose is extremely sensitive to geosmin and is able to detect it at concentrations as low as 5 parts per trillion.
Kenyan Economy


The human nose is extremely sensitive to geosmin and is able to detect
it at concentrations as low as 5 parts per trillion.
Some scientists believe that humans appreciate the rain scent because
ancestors may have relied on rainy weather for survival

read more






Tea exports to Khartoum have been hit by a shortage of dollars following a coup this month, with traders grappling with delayed payments for deliveries. @dailynation
Kenyan Economy


East African Tea Traders Association managing director Edward Mudibo
said there have been delays in payment as unavailability of dollars
hit the Sudanese market.
“Our tea sales to Sudan has not been disrupted following the coup.
However, traders have experienced a serious shortage of dollars in
Sudan that has delayed payment to traders,” Mr Mudibo told the
Business Daily in an interview.
Sudan remains one of the key markets for Kenya’s tea earning the
country more than Sh5 billion in the last three years.
In January the country bought 1.14 million kilogrammes of tea, which
was a rise from 631,859 it bought in the corresponding period last
year.

read more






.@KeEquityBank Group an additional Sh1 billion in its Tanzanian banking subsidiary last year @BD_Africa
Kenyan Economy


Equity’s Tanzanian unit recorded a pre-tax loss of Sh559 million last
year, reversing a pre-tax profit of Sh352 million in 2017. It was the
only unit to report a loss in the review period.

read more


@KeEquityBank Group share price data
Kenyan Economy


Par Value:                  0.50/-
Closing Price:           41.90
Total Shares Issued:          3702777020.00
Market Capitalization:        155,146,357,138
EPS:             5.25
PE:                 7.981

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by Aly Khan Satchu (www.rich.co.ke)
 
 
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April 2019
 
 
 
 
 
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